MONEY MARKET FUNDS A SHARES L SHARES

Transcription

1 MONEY MARKET FUNDS A SHARES L SHARES October 1, 2004 PRIME QUALITY MONEY MARKET FUND TAX-EXEMPT MONEY MARKET FUND U.S. GOVERNMENT SECURITIES MONEY MARKET FUND U.S. TREASURY MONEY MARKET FUND VIRGINIA TAX-FREE MONEY MARKET FUND INVESTMENT ADVISER: TRUSCO CAPITAL MANAGEMENT, INC. (the "Adviser")

2 PROSPECTUS ABOUT THIS PROSPECTUS The STI Classic Funds is a mutual fund family that offers shares in separate investment portfolios that have individual investment goals and strategies. This prospectus gives you important information about the A Shares and L Shares of the Money Market Funds (Funds) that you should know before investing. Please read this prospectus and keep it for future reference. This prospectus has been arranged into different sections so that you can easily review this important information. On the next page, there is some general information you should know about risk and return that is common to each of the Funds. For more detailed information about each Fund, please see: 2 PRIME QUALITY MONEY MARKET FUND 14 PORTFOLIO MANAGERS 5 TAX-EXEMPT MONEY MARKET FUND 14 PURCHASING, SELLING AND EXCHANGING FUND SHARES U.S. GOVERNMENT SECURITIES MONEY MARKET FUND 7 19 U.S. TREASURY MONEY MARKET FUND VIRGINIA TAX-FREE MONEY MARKET FUND 20 DIVIDENDS AND DISTRIBUTIONS TAXES FINANCIAL HIGHLIGHTS MORE INFORMATION ABOUT RISK MORE INFORMATION ABOUT FUND INVESTMENTS INVESTMENT ADVISER INSIDE BACK COVER BACK COVER PRIVACY POLICY HOW TO OBTAIN MORE INFORMATION ABOUT THE STI CLASSIC FUNDS Fund Summary Investment Strategy What are the principal risks of investing? Performance Information What is an Average? Fund Fees and Expenses More Information About Fund Investments Investment Adviser Purchasing, Selling and Exchanging Fund Shares Sales Charges October 1, 2004

3 PROSPECTUS 1 CUSIP/TICKER SYMBOLS Fund Name Class Inception Ticker CUSIP Prime Quality Money Market Fund A Shares 6/8/92 SQIXX Prime Quality Money Market Fund L Shares 10/4/99 SQFXX Tax-Exempt Money Market Fund A Shares 6/8/92 SEIXX U.S. Government Securities Money Market Fund A Shares 6/8/92 SUIXX U.S. Treasury Money Market Fund A Shares 9/30/03 SATXX Virginia Tax-Free Money Market Fund A Shares 5/5/93 CIAXX RISK/RETURN INFORMATION COMMON TO THE STI CLASSIC FUNDS Each Fund is a mutual fund. A mutual fund pools shareholders money and, using professional investment managers, invests it in securities. Each Fund has its own investment goal and strategies for reaching that goal. The Adviser invests Fund assets in a way that it believes will help a Fund achieve its goal. Still, investing in each Fund involves risk and there is no guarantee that a Fund will achieve its goal. The Adviser s judgments about the markets, the economy or companies may not anticipate actual market movements, economic conditions or company performance, and these judgments may affect the return on your investment. In fact, no matter how good a job the Adviser does, you could lose money on your investment in the Fund, just as you could with other investments. A Fund share is not a bank deposit and it is not insured or guaranteed by the FDIC or any government agency.

4 2 PROSPECTUS PRIME QUALITY MONEY MARKET FUND Fund Summary Investment Goal Investment Focus Principal Investment Strategy Investor Profile High current income, while preserving capital and liquidity Money market instruments Attempts to identify money market instruments with the most attractive risk/return trade-off Conservative investors who want to receive current income from their investment Investment Strategy The Prime Quality Money Market Fund invests exclusively in high quality U.S. money market instruments and foreign money market instruments denominated in U.S. dollars. In selecting investments for the Fund, the Adviser tries to increase income without adding undue risk. The Adviser analyzes maturity, yields, market sectors and credit risk. Investments are made in money market instruments with the most attractive risk/return trade-off. As a money market fund, the Fund follows strict rules about credit risk, maturity and diversification of its investments. What are the principal risks of investing in this Fund? This bar chart shows changes in the performance of the Fund s A Shares from year to year.* % 5.30% 4.82% 4.97% 4.92% 4.56% 5.86% 3.54% 1.26% 0.49% Best Quarter Worst Quarter 1.51% 0.08% An investment in the Fund is subject to (9/30/00) (12/31/03) income risk, which is the possibility that the Fund s * The performance information shown above is based on a calendar year. yield will decline due to falling interest rates. A Fund The Fund s total return from 1/1/04 to 6/30/04 was 0.16%. share is not a bank deposit and is not insured or guaranteed by the FDIC or any government agency. In addition, although a money market fund seeks to keep a Average Annual Total Returns constant price per share of $1.00, you may lose money This table compares the Fund s average annual total by investing in the Fund. returns for the periods ended December 31, 2003, to those of the imoneynet, Inc. First Tier Retail Average. These returns reflect applicable sales charges and assumes Performance Information shareholders redeem all of their shares at the end of the The bar chart and the performance table period indicated. that follow illustrate the risks and volatility A Shares 1 Year 5 Years 10 Years of an investment in the Fund. Of course, the Fund s Prime Quality Money past performance does not necessarily indicate how the Fund will perform in the future. Market Fund 0.49% 3.12% 3.92% imoneynet, Inc. First Tier Retail Average 0.49% 3.04% 3.87%

5 PROSPECTUS 3 PRIME QUALITY MONEY MARKET FUND L Shares 1 Year 5 Years Since Inception* Prime Quality Money Market Fund 0.35% N/A 2.28% What is an Average? An average is a composite of mutual funds with similar investment goals. The imoneynet, Inc. First Tier Retail Average is a widely-recognized composite of money market funds that invest in imoneynet, Inc. First Tier Retail Average 0.49% N/A 2.81% securities rated in the highest category by at least two of * Since inception of the L Shares on October 4, Benchmark returns the recognized rating agencies. The number of funds in since September 30, 1999 (benchmark returns available only on a the Average varies. month end basis). To obtain information about the Fund s current yield, call Fund Fees and Expenses This table describes the Fund s fees and expenses that you may pay if you buy and hold Fund shares. Shareholder Fees (fees paid directly from your investment) A Shares L Shares Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None None Maximum Deferred Sales Charge (as a percentage of net asset value)* None 2.00% * This sales charge is imposed if you sell L Shares within 1 year of your purchase. See Sales Charges. Annual Fund Operating Expenses (expenses deducted from Fund assets) A Shares L Shares Investment Advisory Fees 0.65% 0.65% Distribution and Service (12b-1) Fees 0.20% 0.75% Other Expenses* 0.05% 0.05% Total Annual Operating Expenses** 0.90% 1.45% * The expense information in the table has been restated to reflect current fees. ** The Adviser or the Distributor may waive a portion of their fees in order to limit the total operating expenses to the levels set forth below. The Adviser or the Distributor may discontinue all or a part of these fee waivers at any time. Prime Quality Money Market Fund A Shares 0.81% Prime Quality Money Market Fund L Shares 0.89%

6 4 PROSPECTUS PRIME QUALITY MONEY MARKET FUND Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be: If you sell your shares at the end of the period: 1 Year 3 Years 5 Years 10 Years A Shares $ 92 $287 $498 $1,108 L Shares $348 $459 $792 $1,735 If you do not sell your shares at the end of the period: 1 Year 3 Years 5 Years 10 Years A Shares $ 92 $287 $498 $1,108 L Shares $148 $459 $792 $1,735 Fund Expenses Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund s expenses in the table above are shown as a percentage of the Fund s net assets. These expenses are deducted from Fund assets. For more information about these fees, see Investment Adviser and Distribution of Fund Shares.

7 PROSPECTUS 5 TAX-EXEMPT MONEY MARKET FUND Fund Summary Investment Goal Investment Focus Principal Investment Strategy Investor Profile High current interest income exempt from federal income taxes, while preserving capital and liquidity Municipal money market instruments Attempts to increase income without added risk by analyzing credit quality Conservative investors who want to receive current tax-exempt income from their investment Investment Strategy The Tax-Exempt Money Market Fund invests substantially all of its net assets in money market instruments issued by municipalities and issuers that pay income exempt from regular federal income taxes. In addition, up to 20% of the Fund s net assets may be invested in securities subject to the alternative minimum tax. In selecting investments for the Fund, the Adviser analyzes the credit quality and structure of each security to minimize risk. The Adviser actively manages the Fund s average maturity based on current interest rates and the Adviser s outlook of the market. As a money market fund, the Fund follows strict rules about credit risk, maturity and diversification of its investments. What are the principal risks of investing in this Fund? Performance Information The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. Of course, the Fund s past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund s A Shares from year to year.* An investment in the Fund is subject to income risk, which is the possibility that the Fund s yield will decline due to falling interest rates. A Fund Best Quarter Worst Quarter share is not a bank deposit and is not insured or 0.95% 0.05% guaranteed by the FDIC or any government agency. In (6/30/00) (9/30/03) addition, although a money market fund seeks to keep a * The performance information shown above is based on a calendar constant price per share of $1.00, you may lose money year. The Fund s total return from 1/1/04 to 6/30/04 was 0.18%. by investing in the Fund. There may be economic or political changes that impact the ability of municipal issuers to repay principal and to make interest payments on municipal securities. Changes in the financial condition or credit rating of municipal issuers also may adversely affect the value of the Fund s securities % 3.36% 2.94% 3.11% 2.90% 2.69% Average Annual Total Returns 3.57% 2.13% 0.79% 0.42% This table compares the Fund s average annual total returns for the periods ended December 31, 2003, to those of the imoneynet, Inc. Tax-Free Retail Average. These returns reflect applicable sales charges and assumes shareholders redeem all of their shares at the end of the period indicated. A Shares 1 Year 5 Years 10 Years Tax-Exempt Money Market Fund 0.42% 1.91% 2.42% imoneynet, Inc. Tax-Free Retail Average 0.44% 1.88% 2.37% To obtain information about the Fund s current yield, call

8 6 PROSPECTUS TAX-EXEMPT MONEY MARKET FUND What is an Average? An average is a composite of mutual funds with similar investment goals. The imoneynet, Inc. Tax-Free Retail Average is a widely-recognized composite of money market funds that invest in shortterm municipal securities, the income of which is exempt from federal taxation. The number of funds in the Average varies. Fund Fees and Expenses This table describes the Fund s fees and expenses that you may pay if you buy and hold Fund shares. Annual Fund Operating Expenses (expenses deducted from Fund assets) A Shares Investment Advisory Fees 0.55% Distribution and Service (12b-1) Fees 0.15% Other Expenses* 0.05% Total Annual Operating Expenses** 0.75% * The expense information in the table has been restated to reflect current fees. ** The Adviser or the Distributor may waive a portion of their fees in order to limit the total operating expenses to the level set forth below. The Adviser or the Distributor may discontinue all or a part of these fee waivers at any time. Tax-Exempt Money Market Fund A Shares 0.67% Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be: 1 Year 3 Years 5 Years 10 Years $77 $240 $417 $930 Fund Expenses Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund s expenses in the table above are shown as a percentage of the Fund s net assets. These expenses are deducted from Fund assets. For more information about these fees, see Investment Adviser and Distribution of Fund Shares.

9 PROSPECTUS 7 U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Fund Summary Investment Goal Investment Focus Principal Investment Strategy Investor Profile High current income, while preserving capital and liquidity U.S. Treasury and government agency securities, and repurchase agreements Attempts to increase income without adding undue risk by analyzing yields Conservative investors who want to receive current income Investment Strategy The U.S. Government Securities Money Market Fund invests exclusively in U.S. Treasury obligations, obligations issued or guaranteed as to principal and interest by agencies or instrumentalities of the U.S. Government, repurchase agreements involving these securities, and shares of registered money market funds that invest in the foregoing. In selecting investments for the Fund, the Adviser tries to increase income without adding undue risk by analyzing yields. The Adviser actively manages the maturity of the Fund and its portfolio to maximize the Fund s yield based on current market interest rates and the Adviser s outlook on the market. As a money market fund, the Fund follows strict rules about credit risk, maturity and diversification of its investments. Performance Information The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. Of course, the Fund s past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund s A Shares from year to year.* % % 4.66% 4.85% 4.73% 4.26% 3.52% % What are the principal risks of investing in this Fund? 0 An investment in the Fund is subject to income risk, which is the possibility that the Fund s yield will decline due to falling interest rates. A Fund Best Quarter Worst Quarter share is not a bank deposit and is not insured or 1.46% 0.06% guaranteed by the FDIC or any government agency. In (12/31/00) (9/30/03) addition, although a money market fund seeks to keep a * The performance information shown above is based on a calendar year. constant price per share of $1.00, you may lose money The Fund s total return from 1/1/04 to 6/30/04 was 0.15%. by investing in the Fund. Although the Fund s U.S. government securities are considered to be among the safest investments, they are not guaranteed against price movements due to changing interest rates % 0.40%

10 8 PROSPECTUS U.S. GOVERNMENT SECURITIES MONEY MARKET FUND What is an Average? An average is a composite of mutual funds with similar investment goals. The imoneynet, Inc. Government & Agency Retail Average is a widely- recognized composite of money market funds that invest in U.S. Treasury bills, repurchase agreements or securities issued by agencies of the U.S. Government. The number of funds in the Average varies. Average Annual Total Returns This table compares the Fund s average annual total returns for the periods ended December 31, 2003, to those of the imoneynet, Inc. Government & Agency Retail Average. These returns reflect applicable sales charges and assumes shareholders redeem all of their shares at the end of the period indicated. A Shares 1 Year 5 Years 10 Years U.S. Government Securities Money Market Fund 0.40% 2.97% 3.78% imoneynet, Inc. Government & Agency Retail Average 0.48% 3.03% 3.82% To obtain information about the Fund s current yield, call Fund Fees and Expenses This table describes the Fund s fees and expenses that you may pay if you buy and hold Fund shares. Annual Fund Operating Expenses (expenses deducted from Fund assets) A Shares Investment Advisory Fees 0.65% Distribution and Service (12b-1) Fees 0.17% Other Expenses* 0.06% Total Annual Operating Expenses** 0.88% * The expense information in the table has been restated to reflect current fees. ** The Adviser or the Distributor may waive a portion of their fees in order to limit the total operating expenses to the level set forth below. The Adviser or the Distributor may discontinue all or a part of these fee waivers at any time. U.S. Government Securities Money Market Fund A Shares 0.80% Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be: 1 Year 3 Years 5 Years 10 Years $90 $281 $488 $1,084 Fund Expenses Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund s expenses in the table above are shown as a percentage of the Fund s net assets. These expenses are deducted from Fund assets. For more information about these fees, see Investment Adviser and Distribution of Fund Shares.

11 PROSPECTUS 9 U.S. TREASURY MONEY MARKET FUND Fund Summary Investment Goal Investment Focus Principal Investment Strategy Investor Profile High current income, while maintaining liquidity Money market instruments issued and guaranteed by the U.S. Treasury Investing in U.S. Treasury obligations and repurchase agreements Conservative investors who want to receive current income from their investment Investment Strategy The U.S. Treasury Money Market Fund invests solely in U.S. Treasury obligations, repurchase agreements that are collateralized by obligations issued or guaranteed by the U.S. Treasury, and shares of registered money market funds that invest in the foregoing. The Fund limits its investments so as to obtain the highest investment quality rating by a nationally recognized statistical rating organization (Standard and Poor s Corporation, AAA). As a money market fund, the Fund follows strict rules about credit risk, maturity and diversification of its investments. What are the principal risks of investing in this Fund? An investment in the Fund is subject to income risk, which is the possibility that the Fund s yield will decline due to falling interest rates. A Fund share is not a bank deposit and is not insured or guaranteed by the FDIC or any government agency. In addition, although a money market fund seeks to keep a constant price per share of $1.00, you may lose money by investing in the Fund. Although the Fund s U.S. Treasury securities are considered to be among the safest investments, they are not guaranteed against price movements due to changing interest rates. Performance Information The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. Of course, the Fund s past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund s T Shares from year to year.* Since T Shares are invested in the same portfolio of securities, returns for A Shares will be substantially similar to those of the T Shares, shown here, and differ only to the extent that A Share expenses are higher, and therefore, performance would be lower than that of the T Shares % 5.33% 4.77% 4.93% 4.82% 4.38% 5.63% 3.32% 1.17% 0.50% Best Quarter Worst Quarter 1.46% 0.09% (12/31/00) (9/30/03) * The performance information shown above is based on a calendar year. The Fund s total return from 1/1/04 to 6/30/04 was 0.15%.

12 10 PROSPECTUS U.S. TREASURY MONEY MARKET FUND Average Annual Total Returns What is an Average? An average is a composite of mutual funds with similar investment goals. The imoneynet, Inc. Treasury & Repo Retail Average is a widely- recognized composite of money market funds that invest in U.S. Treasury bills and repurchase agreements backed by these securities. The number of funds in the Average varies. This table compares the Fund s average annual total returns for the periods ended December 31, 2003, to those of the imoneynet, Inc. Treasury & Repo Retail Average. These returns reflect applicable sales charges and assumes shareholders redeem all of their shares at the end of the period indicated. T Shares 1 Year 5 Years 10 Years U.S. Treasury Money Market Fund 0.50% 2.98% 3.82% imoneynet, Inc. Treasury & Repo Retail Average 0.42% 2.91% 3.74% To obtain information about the Fund s current yield, call Fund Fees and Expenses This table describes the Fund s fees and expenses that you may pay if you buy and hold Fund shares. Annual Fund Operating Expenses (expenses deducted from Fund assets) A Shares Investment Advisory Fees 0.65% Distribution and Service (12b-1) Fees 0.15% Other Expenses* 0.06% Total Annual Operating Expenses** 0.86% * The expense information in the table has been restated to reflect current fees. ** The Adviser or the Distributor may waive a portion of their fees in order to limit the total operating expenses to the level set forth below. The Adviser or the Distributor may discontinue all or a part of these fee waivers at any time. U.S. Treasury Money Market Fund A Shares 0.75% Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be: 1 Year 3 Years 5 Years 10 Years $88 $274 $477 $1,061 Fund Expenses Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund s expenses in the table above are shown as a percentage of the Fund s net assets. These expenses are deducted from Fund assets. For more information about these fees, see Investment Adviser and Distribution of Fund Shares.

13 PROSPECTUS 11 VIRGINIA TAX-FREE MONEY MARKET FUND Fund Summary Investment Goal Investment Focus Principal Investment Strategy Investor Profile High current income exempt from federal and Virginia income taxes, while preserving capital and liquidity Virginia municipal money market instruments Attempts to increase income without added risk by analyzing credit quality Virginia residents who want to receive current income exempt from federal and state income taxes Investment Strategy The Virginia Tax-Free Money Market Fund invests substantially all of its assets in money market instruments issued by municipalities and issuers that pay income exempt from federal and Virginia income taxes. Issuers of these securities can be located in Virginia, Puerto Rico and other U.S. territories and possessions. In addition, up to 20% of the Fund s net assets may be invested in securities subject to the alternative minimum tax. In selecting investments for the Fund, the Adviser analyzes the credit quality and structure of each security to minimize risk. The Adviser actively manages the Fund s average maturity based on current interest rates and the Adviser s outlook of the market. As a money market fund, the Fund follows strict rules about credit risk, maturity and diversification of its investments. What are the principal risks of investing in this Fund? make interest payments on municipal securities. Changes in the financial condition or credit rating of municipal issuers also may adversely affect the value of the Fund s securities. Performance Information The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. Of course, the Fund s past performance does not necessarily indicate how the Fund will perform in the future. This bar chart shows changes in the performance of the Fund s A Shares from year to year.* An investment in the Fund is subject to 2 income risk, which is the possibility that the Fund s 0.79% yield will decline due to falling interest rates. A Fund 1 share is not a bank deposit and is not insured or 0.45% guaranteed by the FDIC or any government agency. In addition, although a money market fund seeks to keep a constant price per share of $1.00, you may lose money by investing in the Fund. Best Quarter Worst Quarter 0.93% 0.06% The Fund s concentration of investments in securities of (12/31/00) (9/30/03) issuers located in Virginia subjects the Fund to economic and government policies within Virginia. * The performance information shown above is based on a calendar year. There may be economic or political changes that impact the ability of municipal issuers to repay principal and to % 3.27% 2.88% 3.07% 2.92% 2.71% 3.55% 2.14% The Fund s total return from 1/1/04 to 6/30/04 was 0.18%.

14 12 PROSPECTUS VIRGINIA TAX-FREE MONEY MARKET FUND Average Annual Total Returns What is an Average? An average is a composite of mutual funds with similar investment goals. The imoneynet, Inc. Tax-Free Retail Average is a widely-recognized composite of money market funds that invest in short- term municipal securities, the income of which is exempt from federal taxation. The number of funds in the Average varies. This table compares the Fund s average annual total returns for the periods ended December 31, 2003, to those of the imoneynet, Inc. Tax-Free Retail Average. These returns reflect applicable sales charges and assumes shareholders redeem all of their shares at the end of the period indicated. A Shares 1 Year 5 Years 10 Years Virginia Tax-Free Money Market Fund 0.45% 1.92% 2.41% imoneynet, Inc. Tax-Free Retail Average 0.44% 1.88% 2.37% To obtain information about the Fund s current yield, call Fund Fees and Expenses This table describes the Fund s fees and expenses that you may pay if you buy and hold Fund shares. Annual Fund Operating Expenses (expenses deducted from Fund assets) A Shares Investment Advisory Fees 0.40% Distribution and Service (12b-1) Fees 0.40% Other Expenses* 0.06% Total Annual Operating Expenses** 0.86% * The expense information in the table has been restated to reflect current fees. ** The Adviser or the Distributor may waive a portion of their fees in order to limit the total operating expenses to the level set forth below. The Adviser or the Distributor may discontinue all or a part of these fee waivers at any time. Virginia Tax-Free Money Market Fund A Shares 0.67% Example This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period. The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be: 1 Year 3 Years 5 Years 10 Years $88 $274 $477 $1,061 Fund Expenses Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund s expenses in the table above are shown as a percentage of the Fund s net assets. These expenses are deducted from Fund assets. For more information about these fees, see Investment Adviser and Distribution of Fund Shares.

15 PROSPECTUS 13 MORE INFORMATION ABOUT RISK Fixed Income Risk More Information About Risk Tax-Exempt Money Market Fund Virginia Tax-Free Money Market Fund The market value of fixed income investments changes in response to interest rate changes and other factors. During periods of falling interest rates, the values of outstanding fixed income securities generally rise. Moreover, while securities with longer maturities tend to produce higher yields, the prices of longer maturity securities are also subject to greater market fluctuations as a result of changes in interest rates. In addition to these fundamental risks, different types of fixed income securities may be subject to the following additional risks: Municipal Issuer Risk Tax-Exempt Money Market Fund Virginia Tax-Free Money Market Fund often affect other regions, countries or states, thus subjecting the Fund to additional risks. More Information About Fund Investments This prospectus describes the Funds primary strategies, and the Funds will normally invest in the types of securities described in this prospectus. However, in addition to the investments and strategies described in this prospectus, each Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Statement of Additional Information. Of course, a Fund cannot guarantee that it will achieve its investment goal. Investment Adviser There may be economic or political changes that impact Trusco Capital Management, Inc., 50 the ability of municipal issuers to repay principal and to Hurt Plaza, Suite 1400, Atlanta, Georgia make interest payments on municipal securities. Changes 30303, serves as the investment adviser to the Funds. to the financial condition or credit rating of municipal As of June 30, 2004, the Adviser had approximately issuers may also adversely affect the value of a Fund s $66.7 billion in assets under management. For the fiscal municipal securities. Constitutional or legislative limits period ended May 31, 2004, the Adviser received on borrowing by municipal issuers may result in advisory fees of: reduced supplies of municipal securities. Moreover, certain municipal securities are backed only by a Prime Quality Money Market Fund 0.54% municipal issuer s ability to levy and collect taxes. Tax-Exempt Money Market Fund 0.45% U.S. Government Securities Money Market In addition, a Fund s concentration of investments in Fund 0.56% issuers located in a single state makes the Fund more U.S. Treasury Money Market Fund 0.56% susceptible to adverse political or economic Virginia Tax-Free Money Market Fund 0.40% developments affecting that state. The Fund also may be The Adviser makes investment decisions for the Funds riskier than mutual funds that buy securities of issuers in and continuously reviews, supervises and administers numerous states. each Fund s respective investment program. The Board Regional Risk of Trustees supervises the Adviser and establishes policies that the Adviser must follow in its management Virginia Tax-Free Money Market Fund activities. To the extent that the Fund s investments are The Adviser may use its affiliates as brokers for Fund concentrated in a specific geographic region, the Fund transactions. may be subject to political and other developments affecting that region. Regional economies are often The Securities and Exchange Commission (SEC) closely interrelated, and political and economic recently adopted new rules and rule amendments under developments affecting one region, country or state the Investment Advisers Act of 1940 that address an investment adviser s fiduciary obligation to its clients

16 14 PROSPECTUS PURCHASING, SELLING AND EXCHANGING FUND SHARES when the adviser has authority to vote their proxies. Classic Funds. Currently no such exchange program is Under the current contractual agreement, the Adviser is available. L Shares of the Prime Quality Money Market authorized to vote proxies on behalf of each Fund. Fund (i) are subject to a 2% contingent deferred sales charge (CDSC) if you redeem your shares within one Information regarding the Adviser s, and thus each year of the date you purchased the original STI Classic Fund s, Proxy Voting Policies and Procedures are Fund L Shares; and (ii) have higher annual expenses provided in the Statement of Additional Information. than A Shares of the Prime Quality Money Market A copy of the Funds Proxy Voting Policies and Fund. Procedures may be obtained by contacting the STI Classic Funds at Option 5, or by visiting How to Purchase Fund Shares Your investment professional can assist you in opening a Portfolio Managers brokerage account that will be used for all transactions regarding the purchase of STI Classic Funds. Once your Each of the Funds is managed by co-portfolio managers account is established, you may buy shares of the Funds or by a portfolio manager who is supported by a backby: up portfolio manager. Mr. Robert S. Bowman, CFA, has served as Managing ) Mail* Director of Trusco since January He has ) Telephone ( ) managed the Virginia Tax-Free Money Market Fund since May 1995, the Tax-Exempt Money Market ) Wire Fund since July 2000, and the U.S. Government ) Automated Clearing House (ACH) Securities Money Market Fund since October * The Funds do not accept cash as a payment for Fund shares. Prior to joining Trusco, Mr. Bowman served as Vice You may also buy shares through investment President of Crestar Asset Management Company from representatives of certain correspondent banks of 1995 to 1999, after serving as an assistant trader at SunTrust Banks, Inc. (SunTrust) and other financial Crestar Asset Management Company from 1994 to institutions that are authorized to place transactions in He has more than 10 years of investment Fund shares for their customers. Please contact your experience. financial institution directly and follow its procedures for Mr. David S. Yealy joined Trusco in Mr. Yealy fund share transactions. Your institution may charge a has served as Managing Director of Trusco since July fee for its services, in addition to the fees charged by a 2000, after serving as Vice President of Trusco since Fund. You will also generally have to address your September He has managed the Prime Quality correspondence or questions regarding a Fund to your Money Market Fund since it began operating in June institution. A Fund may reject any purchase order if it is 1992 and the U.S. Treasury Money Market Fund determined that accepting the order would not be in since October He has more than 19 years of the best interests of the STI Classic Funds or its investment experience. shareholders. Purchasing, Selling and Exchanging Fund Shares When Can You Purchase Shares? You may purchase shares on any day that the New York Stock Exchange (NYSE) and the Federal Reserve are open for business (a Business Day). The price per share (the offering price) will be the net asset value per share (NAV) next determined after the Funds receive your purchase order. Each Fund calculates its NAV once each Business Day at the regularly- scheduled close of normal trading on the NYSE (normally 4:00 p.m., Eastern Time.) So, for you to be This section tells you how to purchase, sell (sometimes called redeem ) and exchange A Shares and L Shares of the Funds. L Shares of the Prime Quality Money Market Fund are available only through exchanges of L Shares of other STI Classic Funds or, potentially, in the future, L Shares of the Prime Quality Money Market Fund may be used to set up a systematic exchange program to purchase L Shares of other STI

17 PROSPECTUS 15 PURCHASING, SELLING AND EXCHANGING FUND SHARES Foreign Investors The Funds do not generally accept investments by non- U.S. persons. Non-U.S. persons may be permitted to invest in the Funds subject to the satisfaction of enhanced due diligence. Customer Identification and Verification To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, you will be asked to provide your name, address, date of birth, and other information that will allow us to identify you. This information will be verified to ensure the identity of all persons opening a mutual fund account. In certain instances, the Funds are required to collect documents to fulfill its legal obligation. Documents eligible to receive dividends declared on the day you submit your purchase order, the Funds must receive your order before 10:30 a.m., Eastern Time for the Tax-Exempt Money Market Fund and Virginia Tax-Free Money Market Fund or before 2:00 p.m., Eastern Time for the Prime Quality Money Market Fund, U.S. Government Securities Money Market Fund and U.S. Treasury Money Market Fund. Also each Fund must receive federal funds (readily available funds) before 4:00 p.m., Eastern Time. Otherwise, your purchase order will be effective the following Business Day, as long as each Fund receives federal funds before the Funds calculate their NAV the following day. You may have to transmit your purchase, sale and exchange requests to SunTrust or other financial institutions at an earlier time for your transaction to become effective that day. This allows the financial institution time to process your request and transmit it to the administrator or transfer agent in time to meet the above stated Fund cut-off times. For more information about how to purchase, sell or exchange Fund shares, including specific SunTrust or other financial institutions internal order entry cut-off times, please contact your financial institution directly. How the Funds Calculate NAV In calculating NAV, a Fund generally values its investment portfolio using the amortized cost valuation method, which is described in detail in the Statement of Additional Information. If the Adviser determines in good faith that this method is unreliable during certain market conditions or for other reasons, a Fund may value its portfolio at market price or fair value prices may be determined in good faith using methods approved by the Board of Trustees. Net Asset Value NAV for one Fund share is the value of that share s portion of the net assets of the Fund. Minimum Purchases To purchase A Shares for the first time, you must invest at least $2,000 in any Fund. Your subsequent investments in any Fund must be made in amounts of at least $1,000 or, if you pay by a statement coupon, $100. A Fund may accept investments of smaller amounts at its discretion. FUNDLINK FUNDLINK is a telephone activated service that allows you to transfer money quickly and easily between the STI Classic Funds and your SunTrust bank account(s). To use FUNDLINK, you must first contact your SunTrust Bank Investment Consultant and complete the FUNDLINK application and authorization agreements. Once you have signed up to use FUNDLINK, simply call the Funds at to complete all of your purchase and redemption transactions. Systematic Investment Plan If you have a checking or savings account with a SunTrust affiliate bank, you may purchase A Shares automatically through regular deductions from your account. With a $500 minimum initial investment, you may begin regularly-scheduled investments from $50 up to $100,000 once or twice a month. The Distributor may close your account if you do not meet this minimum investment requirement at the end of two years. Customer Identification

18 16 PROSPECTUS PURCHASING, SELLING AND EXCHANGING FUND SHARES provided in connection with your application will be used solely to establish and verify a customer s identity. The Funds are required by law to reject your new account application if the required identifying information is not provided. Attempts to collect the missing information required on the application will be performed by either contacting you or, if applicable, your broker. If this information is unable to be obtained within a timeframe established in the sole discretion of the Funds, your application will be rejected. However, the Funds reserve the right to close your account at the then-current day s price if the Funds are unable to verify your identity. Attempts to verify your identity will be performed within a timeframe established in the sole discretion of the Funds. If the Funds are unable to verify your identity, the Funds reserve the right to liquidate your account at the then- current day s price and remit proceeds to you via check. The Funds reserve the further right to hold your proceeds until your original check clears the bank. In such an instance, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. Anti-Money Laundering Program Customer identification and verification is part of the Funds overall obligation to deter money laundering under federal Law. The Funds have adopted an Anti- Money Laundering Compliance Program designed to prevent the Funds from being used for money laundering or the financing of terrorist activities. In this regard, the Funds reserve the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services, or (iii) involuntarily redeem your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of the Funds or in cases when the Funds are requested or compelled to do so by governmental or law enforcement authority. Sales Charges Upon receipt of your application in proper form (or upon receipt of all identifying information required on the application), your investment will be accepted and your order will be processed at the NAV per share next- determined. Contingent Deferred Sales Charges (CDSC) L Shares You do not pay a sales charge when you purchase L Shares. The offering price of L Shares is simply the next calculated NAV. But if you sell your shares within the first year after your purchase, you will pay a CDSC equal to 2.00% for either (1) the NAV of the shares at the time of purchase, or (2) NAV of the shares next calculated after the Fund receives your sale request, whichever is less. The sales charge does not apply to shares you purchase through reinvestment of dividends or distributions. So, you never pay a deferred sales charge on any increase in your investment above the initial offering price. This sales charge does not apply to exchanges of L Shares of one Fund for L Shares of another Fund. If You Sell Your L Shares The CDSC will be waived if you sell your L Shares for the following reasons: ) to make certain withdrawals from a retirement plan (not including IRAs); ) because of death or disability; or ) for certain payments under the Systematic Withdrawal Plan up to 12% annually of the value of your shares of each Fund held at the time of the withdrawal (the Systematic Withdrawal Plan is discussed later in more detail). Offering Price of Fund Shares The offering price of A Shares and L Shares is the NAV next calculated after the transfer agent receives your request. How to Sell Your Fund Shares If you own your shares through a brokerage account with SunTrust Securities, you may sell your shares on any Business Day by contacting SunTrust Securities directly by mail or telephone at The minimum amount for telephone redemptions is $1,000.

19 PROSPECTUS 17 PURCHASING, SELLING AND EXCHANGING FUND SHARES If you own your shares through an account with a broker or other institution, contact that broker or institution to sell your shares. If you would like to sell $25,000 or more of your shares, please notify the Fund in writing and include a signature guarantee by a bank or other financial institution (a notarized signature is not sufficient). The sale price of each share will be the next NAV determined after the Fund receives your request less, in the case of L Shares of the Prime Quality Money Market Fund, any applicable deferred sales charge. Redemption orders must be received by the Funds on any Business Day before 10:30 a.m., Eastern Time for the Tax-Exempt Money Market Fund and Virginia Tax- Free Money Market Fund or 2:00 p.m., Eastern Time for the Prime Quality Money Market Fund, U.S. Government Securities Money Market Fund and U.S. Treasury Money Market Fund. Orders received after these times will be executed the following Business Day. Systematic Withdrawal Plan If you have at least $10,000 in your account, you may use the systematic withdrawal plan. Under the plan you may arrange monthly, quarterly, semi-annual or annual automatic withdrawals of at least $50 from any Fund. The proceeds of each withdrawal will be mailed to you by check or, if you have a checking or savings account with a bank, electronically transferred to your account. Receiving Your Money Normally, the Funds will send your sale proceeds within five Business Days after the Fund receives your request, but it may take up to seven days. Your proceeds can be wired to your bank account (subject to a $7.00 fee) or sent to you by check. If you recently purchased your shares by check or through ACH, redemption proceeds may not be available until your check has cleared (which may take up to 15 days from your date of purchase). Redemptions in Kind The Funds generally pay sale (redemption) proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Funds remaining shareholders), the Funds might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). It is highly unlikely that your shares would ever be redeemed in kind, but if they were you would probably have to pay transaction costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption. Involuntary Sales of Your Shares If your account balance drops below the required $2,000 because of redemptions you may be required to sell your shares. But, the Funds will always give you at least 60 days written notice to give you time to add to your account and avoid the sale of your shares. Suspension of Your Right to Sell Your Shares A Fund may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons approved by the SEC. More information about this is in the Statement of Additional Information. How to Exchange Your Shares You may exchange your shares on any Business Day by contacting SunTrust Securities or your financial institution by mail or telephone. Exchange requests must be for an amount of at least $1,000. The exchange privilege is not intended as a vehicle for short-term trading. Excessive exchange activity may interfere with Fund management and may have an adverse effect on all shareholders. In order to limit excessive exchange activity and in other circumstances where it is in the best interests of a Fund, all Funds reserve the right to revise or terminate the exchange privilege, limit the amount or number of exchanges or reject any exchange or restrict or refuse purchases if (1) a Fund or its manager(s) believes the Fund would be harmed or unable to invest effectively, or (2) a Fund receives or anticipates orders that may dramatically affect the Fund. If you recently purchased shares by check or through ACH, you may not be able to exchange your shares until your check has cleared (which may take up to 15 days from your date of purchase). This exchange privilege may be changed or canceled at any time upon 60 days notice.

20 18 PROSPECTUS DIVIDENDS, DISTRIBUTIONS AND TAXES Exchanges modify, suspend or terminate telephone transaction When you exchange shares, you are really selling your privileges at any time. shares and buying other Fund shares. So, your sale price and purchase price will be based on the NAV next Distribution of Fund Shares calculated after the Fund receives your exchange Each Fund has adopted a distribution plan that allows request. the Fund to pay distribution and service fees for the sale and distribution of its shares, and for services provided A Shares to shareholders. Because these fees are paid out of a You may exchange A Shares of any Fund for A Shares Fund s assets continuously, over time these fees will of any other Fund. If you exchange shares that you increase the cost of your investment and may cost you purchased without a sales charge or with a lower sales more than paying other types of sales charges. charge into a Fund with a sales charge or with a higher Maximum distribution fees, as a percentage of average sales charge, the exchange is subject to an incremental daily net assets are as follows: sales charge (e.g., the difference between the lower and For A Shares higher applicable sales charges). If you exchange shares into a Fund with the same, lower or no sales charge Prime Quality Money Market Fund 0.20% there is no incremental sales charge for the exchange. Tax-Exempt Money Market Fund 0.15% U.S. Government Securities L Shares Money Market Fund 0.17% You may exchange L Shares of any Fund for L Shares of U.S. Treasury Money Market Fund 0.15% any other Fund. For purposes of computing the CDSC Virginia Tax-Free Money Market Fund 0.40% applicable to L Shares, the length of time you have owned your shares will be measured from the original For L Shares of the Prime Quality Money Market Fund, date of purchase and will not be affected by any the maximum distribution fee is 0.75% of the average exchange. However, if you exchange L Shares of any daily net assets of the Fund. STI Classic Fund for L Shares of the STI Classic The distributor may provide financial assistance in Institutional U.S. Government Securities Super Short connection with pre-approved seminars, conferences and Income Plus Fund, you must first pay any applicable advertising to the extent permitted by applicable state or CDSC for the shares you are selling. Similarly, if you self-regulatory agencies, such as the National exchange L Shares of the STI Classic Institutional U.S. Association of Securities Dealers. Government Securities Super Short Income Plus Fund for L Shares of any other STI Classic Fund, any CDSC From its own assets, the Adviser, the distributor or their for the Fund you are exchanging into will be computed affiliates may make payments based on gross sales and from the date of the exchange. current assets to selected brokerage firms or institutions. The amount of these payments may be substantial. The Telephone Transactions minimum aggregate sales required for eligibility for such payments, and the factors in selecting the brokerage Purchasing, selling and exchanging Fund shares over the firms and institutions to which they will be made, are telephone is extremely convenient, but not without risk. determined from time to time by the Adviser or the Although the Funds have certain safeguards and distributor. In addition, the Adviser, the distributor or procedures to confirm the identity of callers and the their affiliates may pay fees, from their own assets, to authenticity of instructions, the Funds are not brokers, banks, financial advisers, retirement plan service responsible for any losses or costs incurred by following providers and other financial intermediaries for telephone instructions the Funds reasonably believe to providing distribution-related or shareholder services, in be genuine. If you or your financial institution transact addition to fees that may be paid by the Funds for these with the Funds over the telephone, you will generally purposes. bear the risk of any loss. The Funds reserve the right to